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New Legislation Limits Use of Confidentiality Agreements to Prevent Discussion of Sexual Harassment

    Client Alerts
  • December 09, 2022

On November 16, 2022, Congress passed the Speak Out Act, which garnered bipartisan support in both the House and the Senate. President Biden signed the legislation on Wednesday, December 7, 2022. The Speak Out Act makes void any nondisclosure or non-disparagement clause that attempts to preemptively prohibit employees from talking about potential future instances of sexual harassment/assault in the workplace. Notably, the Speak Out Act does not implicate post-harassment/assault agreements similar to those at issue with Harvey Weinstein.

The Speak Out Act follows closely on the heels of federal legislation that ended forced arbitration of sexual assault and sexual harassment disputes, thereby granting survivors of sexual assault/harassment access to a courthouse even if they originally signed an exclusive arbitration agreement. These two laws now couple with a wider backdrop of recent protection for employees that eliminated the employer’s ability to make tax deductions for settlements, payouts, and attorney’s fees in cases related to sexual harassment or sexual abuse if such payments were subject to a nondisclosure agreement.

An interesting nuance to note here is that Congress has continued to show significantly more interest in providing greater protection against sexual harassment in the workplace than against racial discrimination or other alleged maltreatment. This could have unintended consequences in litigation where public policy arguments are made based on Congress’ inaction related to nondisclosures and other forms of discrimination in the workplace.

Regardless, employers should work closely with in-house and outside counsel to ensure that any contracts or agreements with nondisclosure or non-disparagement clauses have specific carve-outs for claims of future sexual harassment. All in all, this legislation will have a limited but important impact on encouraging safe working environments free of sexual harassment.